Is family ruining your business? Fire them, Lemonis says

Blood is thicker than water but when it comes to mixing family with business, success might be better achieved working with strangers.

Sure, knowing each other so well can be a bonus, but that same closeness grants an easy ability to push each other's buttons. Adults can revert to childhood behavior and treat each other in ways they'd never treat regular employees.

"Typically I encourage people not to hire family members," said Marcus Lemonis, CEO of the multibillion-dollar company Camping World and star of CNBC's "The Profit."

Lemonis invests in "sick businesses" to turn them around both in real life and on the show. His latest project is Courage.b—a family-run clothing company with seven retail stores in the New York City area.

Despite generating more than $5 million in sales last year, Courage.b is operating in the red; and it's happening because of a family power struggle.

"There's a big dilemma between who's really in charge of that business," Lemonis said. "And in order for this business to succeed there has to be one clear leader."

If you must hire family…do it right

CNBC

Marcus Lemonis with family co-workers at Courage.B on "The Profit."

Even though he doesn't recommend it, Lemonis said if family members do get into business together, they must clearly define roles and set expectations of who does what.

"I would even tell you that the standards and the expectations of a family member will always and should always be higher than an average employee," he said. "If family members slack, why couldn't everybody else get away with it?"

It's also important to create a reporting structure so that relatives aren't supervising each other; instead, each is spread out across the enterprise.

Lastly, anyone who isn't properly doing their job must be disciplined in the same way—blood or not, Lemonis said.

Don’t drag employees into family drama

The workplace is no place to air out dirty laundry, but it's often where families in business spend most of their time together and where a lot of drama plays out.

When tempers flare at the office, other employees likely get dragged into the mess. That's one of the worst things an owner can do in business, Lemonis said.

"The employees have a hard enough time working, let alone shifting whom they're supposed to work for and what they're supposed to do," he said.

Family members must respect each other, especially in front of their co-workers.